OFCCP Proposes Sweeping Changes to Audit Scheduling Letter

Earlier this week, OFCCP published proposed changes to the Supply & Service Scheduling Letter an...

Earlier this week, OFCCP published proposed changes to the Supply & Service Scheduling Letter and Itemized Listing (Scheduling Letter). The Scheduling Letter formally initiates a review of federal contractors selected for a compliance audit by the agency and identifies the items that a federal contractor must initially produce to OFCCP during the audit.

The proposed changes are significant and far-reaching, and if finalized, will significantly increase the burden on federal contractors. While the proposed changes are worth a close read, below are some of the more significant proposed revisions:

  1. Consistent with the agency’s practice during COVID, the proposal would allow OFCCP to issue the Scheduling Letter via email with a read receipt requested, rather than certified mail.
  2. Post-secondary institutions and federal contractors with campus-like settings, such as hospitals or IT companies, that maintain multiple AAPs may be required to submit all AAPs in the city and state selected for a compliance review. This is a significant departure from OFCCP’s historical practice of selecting a single, specific establishment for review, unless a contractor prepared functional AAPs.
  3. The proposal requests that contractors submit their responses to OFCCP electronically via a provided email address. Contractors will still have the option to send submissions to OFCCP via USPS or other delivery means.
  4. OFCCP is proposing that contractors provide more information about their placement goal setting process, including evidence that the most current external availability data was used, the reasonable recruitment areas selected, and the pool of promotable employees.
  5. The proposal adds a new requirement to provide a list “identifying all action-oriented programs designed to correct any problem areas identified” in a contractor’s EO 11246 AAP. This requirement reflects OFCCP’s focus in current audits on a contractor’s action-oriented programs, but seeks production of this information in all audits, not just those where the agency’s desk audit revealed a possible concern.
  6. The proposal increases the amount of information contractors will have to provide about their disability utilization analysis, veteran hiring benchmark and written assessment of the effectiveness of their outreach efforts for individuals with disabilities and protected veterans. Consistent with the agency’s focus on the action items contractors undertake to address identified problem areas, these revised requests would require contractors to detail specific steps and action plans if the disability utilization or veteran hiring benchmark were not met.
  7. Academic institutions would be required to provide their Integrated Postsecondary Education Stata Systems (IPEDS) data for the last three years.
  8. OFCCP also proposes that contractors provide “documentation of policies and practices regarding all employment recruiting, screening, and hiring mechanisms, including the use of artificial intelligence, algorithms, automated systems or other technology-based selection procedures.” This requirement is also new and reflects the agency’s focus on the use of artificial intelligence in employment decisions.
  9. Contractors would provide significantly more data about their promotion and termination activity, including applicable policies, information about whether promotions were competitive or non-competitive, data regarding the previous and current supervisor, and previous and current compensation for each promotion, and termination data separated by reason.
  10. Contractors would be required to provide OFCCP with two compensation snapshots under the new Scheduling Letter. Currently, contractors are required to provide OFCCP with employee-level compensation data as of the date of the organizational display or workforce analysis (generally, the first day of a contractor’s AAP year). Contractors also would have to provide OFCCP with employee-level compensation data as of the date of the prior year’s organizational display or workforce analysis.
  11. The proposal “clarifies” that “temporary employees including those provided by staffing agencies” should be included on a contractor’s compensation snapshot. The proposal also mandates that contractors provide compensation policies and additional compensation factors. It is currently optional for contractors to provide this data under the current Scheduling Letter.
  12. Consistent with OFCCP’s recent Directive 2022-01 Revision 1, the proposal would require “documentation that the contractor has satisfied its obligation to evaluate its “compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities.” Guidelines regarding what is required can be found here.
  13. The proposal adds a new requirement to provide copies of EEO employment policies. In addition to typical policies such as a company’s antiharassment policies, this request seeks access to “employment agreements, such as arbitration agreements, that impact employees’ equal opportunity rights and complaint processes.”

The proposed Scheduling Letter and OFCCP’s Supporting Statement explaining its requested changes can be found at https://www.regulations.gov/docket/OFCCP-2022-0004. The OFCCP is accepting comments on its proposal through January 20, 2023.

Historically, changes to the Scheduling Letter take a long time to finalize. After the initial comment period, the OFCCP often makes further changes and any revisions also need to be approved by the Office of Management and Budget since the Scheduling Letter is subject to the Paperwork Reduction Act.

Until the changes are finalized, supply & service contractors on current audit lists will continue to receive the Scheduling Letter used by the OFCCP in the past. The proposal also does not impact the items requested by the agency during a construction review.

Berkshire will be closely monitoring developments about the agency’s proposed changes to its audit process and will keep you updated. Contractors who are interested in submitting written comments can do so at Regulations.gov.

Lynn A. Clements, Director, Audit and HR Services
Lynn A. Clements, Director, Audit and HR Services
As Berkshire’s Director of Audit & HR Services, Lynn manages Berkshire’s Pay Equity, HR Services and Audit Defense practices. With 25 years of experience in the EEO and affirmative action space -- including nearly eight years working as a former senior official at the EEOC and OFCCP -- Lynn brings a unique blend of regulatory knowledge and practical compliance expertise to every project she oversees.

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